Advertising

Yes. Section 4-6 of the Rules requires that all advertising must include the licensee name of the brokerage in a prominent and easily readable way. When assessing this, the Council gives consideration to the prominence of the brokerage’s name in relation to the rest of the advertisement and the relative ease with which the public can determine who the brokerage is. While not required, it is also recommended that the brokerage phone number be included in advertising. The brokerage’s address is not required to be included in advertising either; however, if an advertisement includes an office address, that address must be the address of the related brokerage office.

Section 4-6 of the Rules requires that if real estate advertising identifies an individual licensee, this must be done by using the licensee name of the individual. The ‘licensee name’ of an individual is defined as “the legal name or a recognizable short form of the legal name of the individual, unless another name is approved by the Council”, in which case the licensee name would be that other approved name. For example, licensee James Brown could advertise as ‘James Brown’ – his legal name, ‘Jim Brown’ – a recognizable short form of his legal name, or, if approved by the Council, ‘Brownie’ – or some other approved name.

Section 4-5 of the Rules states that a licensee must ensure that their licensee name is clearly indicated in the course of providing real estate services. This includes any advertising. For a brokerage, its licensee name is either the legal name of the brokerage, or the trade name of the brokerage if that trade name has been approved by the Council and been registered with the Registrar of Companies. If a trade name has been approved, then the brokerage must advertise under that trade name. For example, if a brokerage’s legal name is 12345 BC Ltd., and its approved trade name is Best Realty, Best Realty is the brokerage’s licensee name, and the name which must be used in all advertising.

Yes. Under section 4-6(5) of the Rules the Council may approve a team name for a group of related licensees. If such a team name has been approved, advertising may also identify the group by this team name. For example, if licensees James Brown and Martha Reeves want to advertise as the ‘Soul Team’, they must first obtain the Council’s approval. So long as the name is not likely to be confused with another team name already approved, and it doesn’t suggest the team is a brokerage, the approval process is a fairly simple one.

Section 4-8 of the Rules states a licensee may not advertise that specific real estate is being offered for sale or other disposition (e.g. for rent) unless the owner, or the authorized agent of the owner, has consented to the advertising.

Licensees may advertise fees and compare those fees to fees charged by other brokerages, but this advertising may not be false or misleading. A licensee may not advertise fees that are not readily available, or that are subject to terms and conditions unless those terms and conditions are clearly explained to the public.
In comparing fees, licensees must also ensure that their advertising is not false or misleading. For example, it is misleading to suggest ‘if you list with me, you will save $5,000.’ This statement has no point of reference by which to compare, and could suggest there is a standard commission rate to be compared to. On the other hand, a statement such as ‘if you list with me, you will pay $5,000 less than were you to list with a company that charges 5%’ would be acceptable if 5% less your fee equals a saving of $5,000.
It would be equally misleading to advertise that ‘we provide a higher level of service for the same fee as everyone else charges’. There is no point of reference by which to compare the scope of services, and such a statement might suggest there is a standard rate of commission to be compared to.

A personal real estate corporation must ensure that its licensee name is clearly indicated in the course of providing real estate services, including all forms of advertising. A personal real estate corporation’s licensee name is its legal name. A personal real estate corporation must use its licensee name in all business documents including listing contracts and other service agreements, contracts of purchase and sale, etc. Advertising that identifies an individual who has a personal real estate corporation must also use the licensee name of the personal real estate corporation, not the individual’s name. For example, if Robert Smith has a personal real estate corporation with the licensee name of Rob Smith Personal Real Estate Corporation, advertising must refer to Rob Smith Personal Real Estate Corporation, not just Robert Smith or Rob Smith.

Property Management

Section 9-2 of the Rules allows an individual licensee to provide rental property management services on his or her own behalf in relation to their own real estate. The Real Estate Services Act and the rules do not apply to the licensee, meaning the property may be managed separately from the related brokerage, so long as the licensee:

provides the services in their own name and not in the name of their related brokerage;

does not indicate the name, address, or telephone number of their related brokerage in any advertising;

discloses to each potential tenant before entering into a tenancy agreement that even though the individual is a licensee, they are not acting as a licensee in this case and the licensee is not regulated under the Real Estate Services Act in relation to the rental real estate; and

discloses in writing to the managing broker of the related brokerage that the licensee will be providing rental property management services on their own behalf in relation to their own real estate. This written disclosure must be with respect to each property that the licensee intends to manage on their own behalf.

If these conditions have not been satisfied, the property must be managed in the name of the brokerage. This can create problems if either the individual licensee is not licensed to provide rental property management services, or the related brokerage is either not licensed to provide, or chooses not to provide, rental property management services.

Section 9-2 of the Rules allows an individual licensee to provide rental property management services, without the legislation applying, to or on behalf of their spouse, family partner, son, daughter, or parent, in relation to rental real estate owned by that person, or by a partnership whose only partners are these people. The Real Estate Services Act and the rules do not apply so long as the licensee:

provides the services in their own name and not in the name of their related brokerage;

does not indicate the name, address, or telephone number of their related brokerage in any advertising;

discloses in writing to each person who owns the real estate, before providing the services, that even though the individual is a licensee, they are not acting as a licensee in this case and the licensee is not regulated under the Real Estate Services Act in relation to the rental real estate;

provides a copy of the written disclosure above to the managing broker of the related brokerage; and

does not receive any remuneration for providing the services.

If these conditions have not been satisfied, the property must be managed in the name of the brokerage. This can create problems if either the individual licensee is not licensed to provide rental property management services, or the related brokerage is either not licensed to provide, or chooses not to provide, rental property management services.

Section 9-3 of the Rules allows an individual licensee who is a strata lot owner to provide strata management services to or on behalf of the strata corporation in which the strata lot is a member so long as the licensee:

does not provide these services to more than 2 strata corporations in which they are a strata lot owner;

discloses in writing to the strata corporation before providing the services that , even though the individual is a licensee, they are not acting as a licensee in this case, the licensee is not regulated under the Real Estate Services Act in relation to the strata management services, and the strata corporation is not entitled to the same protections applicable under the Real Estate Services Act to persons who deal with licensees who are not acting under this exemption;

provides a copy of the written disclosure above to the managing broker of the related brokerage;

does not have sole signing authority for approval of expenditures or withdrawal of funds on behalf of the strata corporation;

on receipt of any funds levied by or due to the strata corporation, these funds are promptly delivered to the strata corporation; and

does not receive any remuneration for providing the services.

If these conditions have not been satisfied, the licensee may not provide strata management services on their own behalf to the strata corporation. They must either refrain from sitting on the strata council or providing the services unless the services are provided in the name of and on behalf of their related brokerage. This can create problems if either the individual licensee is not licensed to provide strata management services, or the related brokerage is either not licensed to provide, or chooses not to provide, strata management services.

Collecting rents is an activity which requires a license to provide rental property management services. A person who is licensed only to provide trading services and/or strata management services may not provide rental property management services. If the person is licensed to provide rental property management services, these services must be provided in the name of and on behalf of their related brokerage. Therefore, a person may not provide these services ‘on the side’. A rental property management service agreement between the brokerage and the client would be necessary, and if the rent is to be collected by the licensee, the trust accounting requirements of the Real Estate Services Act apply.

Disclosure

The obligation arises out of the agency relationship. Agents have an obligation to disclose to their client (principal) all known material information about their real estate services, the real estate itself and the trade in real estate for which the services relate, as well as an obligation to disclose any potential conflicts of interest between their own interests and the interests of their clients. What a buyer’s agent earns from a particular trade is not that agent’s private information as far as the buyer client is concerned.

The Council is not dictating how this disclosure must be made, only that it must be. The Council has created forms that can be used and which are available by clicking here. However, licensees who are members of a real estate board should check with that board to determine if it has policies with respect to this disclosure. For disclosure by buyer’s agents to buyers, the Council has suggested that a combination of providing a prospective buyer with a copy of the Working with a Realtor brochure (which discloses the source of remuneration in typical trades), and providing that buyer with a copy of the MLS property information sheet which includes the remuneration offered to a cooperating brokerage is sufficient in most cases. It is good business practice for a licensee to have the buyer initial whatever document is used for this disclosure. Such disclosures must be made in a timely manner, which means when the information is useful. Therefore, this disclosure must be made as soon as practicable, but in any event, before the buyer makes an offer.

The brokerage is the agent. “Limited” dual agency means that the brokerage has two clients. This requires the brokerage, and its licensees, to be impartial. The only limitations in the Limited Dual Agency Agreement on a brokerage’s obligation to disclose are that the brokerage is not to disclose information with respect to either client’s acceptable price or terms, motivation, or personal information (without written consent). Otherwise, the brokerage must disclose to both clients all material information with respect to their services, the real estate, and the trade. Consequently, whether a dual agency trade involves one licensee or more than one licensee related to the same brokerage, the remuneration to be disclosed is the total remuneration to be earned by the brokerage.

In most transactions, sellers have, through a listing contract, appointed a brokerage to act as their agent. That listing contract stipulates the commission to be paid to the listing brokerage, and typically authorizes the listing brokerage to share a specific portion of its commission with a co-operating brokerage. Where a brokerage is acting as an agent representing a buyer who buys such a listing, that buyer’s agent is paid the co-operating broker’s portion of the commission by the listing brokerage. Therefore, the ‘source’ of the buyer’s agent’s remuneration is the listing brokerage, and that is what should be disclosed to the buyer, along with the amount of that remuneration payable to the brokerage.

As discussed in the question above, a brokerage acting as a dual agent, whether through one licensee or two or more licensees of the same brokerage, receives its remuneration (typically) by way of the listing contract it has entered into with the seller. The brokerage will not be sharing its remuneration with any co-operating brokerage. Therefore, in dual agency the ‘source’ of the brokerage’s remuneration is the seller wherever that remuneration arises as a result of a listing contract.

Only if the buyer ends up paying the buyer brokerage’s remuneration directly. The “standard form” Exclusive Buyer’s Agency Contract available through real estate boards states in clause 4B that “Prior to the Buyer making an offer to purchase a property, the Buyer’s Brokerage will advise the Buyer of the total amount of remuneration offered by the seller and the listing brokerage to be paid to the Buyer’s Brokerage for assisting in obtaining a buyer for that property.” Clause 4E goes on to state: “The Buyer’s Brokerage will advise the Buyer of any remuneration, other than that described in Clause 4B, to be received by the Buyer’s Brokerage in respect of that property.” These are precisely the types of disclosure contemplated by section 5-11 of the Rules.

The definition of ‘remuneration’ is very broad and includes referral fees. Therefore a licensee has an obligation to disclose to a client any referral fee they will receive in the course of providing real estate services to that client. See section 5-11.

Yes, although this is not a requirement under section 5-11 of the Rules. Section 3-3(f) of the Rules requires a licensee to disclose “all known material information respecting the real estate services” being provided. The fact that a licensee has agreed to pay a referral fee (often but not always based on a percentage of the remuneration to be paid by that seller) is material.

This section refers to benefits received in relation to providing rental property management or strata management services where these benefits are received as a result of an expenditure made by or on behalf of a principal. For example, let’s say that every time a strata management brokerage pays an invoice for a strata corporation client which uses the services of a particular landscaping company, that brokerage receives a 10% rebate paid directly to the brokerage. Section 5-12 of the Rules requires that the nature and extent of this benefit must be disclosed to the strata corporation before that benefit is accepted by the brokerage.

Brokerage Issues

Section 3-1(4) of the Rules requires that a managing broker ensure that all parties to the agreement relating to the trade in real estate are immediately notified if the deposit contemplated by the agreement is either not received or is not honoured. Such notice must either be given in writing or confirmed in writing.

Scenario: A Contract of Purchase and Sale requires a buyer to provide a deposit, which is to be held in trust by ABC Brokerage (the buyer’s brokerage), by January 31st. The deposit is not received by ABC Brokerage by January 31st.

As soon as practicable, the licensee acting for the buyer must advise ABC Brokerage that the deposit cheque has not been received. ABC Brokerage must then advise the seller’s brokerage (XYZ Brokerage) that the deposit has not been received. In turn, XYZ Brokerage must advise its seller client.

Because section 3-1(4) of the Rules requires the managing broker to ensure that the seller is notified, regardless of who actually does the notifying, ABC Brokerage should notify the managing broker of XYZ Brokerage and follow up by confirming, in writing, with a copy to the listing licensee. If the managing broker of XYZ Brokerage cannot be contacted right away, then the listing licensee should be notified with follow-up written confirmation and a copy provided to the managing broker.

Yes we do. Before you set up your data management system, make sure you are familiar with sections 8-9.1 and 8-10 of the Rules, and section 25 of RESA. Brokerages must ensure that copies of all documents are kept in BC, and that the copies can easily be transferred to a printed format for inspection by the Council, if requested. This includes brokerage accounting records, contracts and agreements, standard forms, correspondence, strata minutes, and more.

When files are stored online, and the server is located outside of BC, paper or electronic copies of the records must be maintained in BC and must be available for inspection. If online files reside on a server located in BC, and the records can be transferred into printed form for inspection, the brokerage does not need to store additional printed or electronic copies of the records.

Keep in mind that the requirements under RESA are not the only legislation you need to be aware of with regards to maintaining records. You should ensure that your brokerage’s practices are compliant with FINTRAC requirements, and any applicable privacy legislation. In addition, remember that if you choose to store records on servers located in the United States, the Patriot Act may apply.

Miscellaneous

Yes, the restriction on having other employment was removed in 2003. As a result, you may have other employment while being licensed under the Real Estate Services Act. However, a licensee must remember that he or she may only provide real estate services on behalf of the brokerage with which they are engaged. This means that they may not be employed or engaged by anyone other than their related brokerage to provide real estate services. For example, a licensee may not be licensed to provide real estate services with ABC Realty Inc. and at the same time act as the employee of a developer, marketing development units on behalf of that developer.

If a licensee is authorized to sign a contract on behalf of a client, section 5-3 of the Rules requires that the licensee must have obtained written authorization from the client or an authorized agent of the client prior to signing the document. It is not acceptable for a licensee to sign a document on a client’s behalf simply on the basis of a verbal authorization from the client. Additionally, licensees should not rely on an e-mail as authorization from a client unless they are certain that the e-mail was written and sent by the person from whom it appears to have been received.

When signing on behalf of a client, licensees should not sign the name of the client. Instead, the licensee should sign his or her own name and indicate beside or below his or her name that he or she is signing as agent for the client as follows: